The Supply Chain Digest's editorial staff recently wrote an editorial on the "Out of Stock" problem faced by Consumer Goods companies. They noted:

"In
fact, inventory levels in consumer goods manufacturers stayed flat
throughout most of the 2000s, and out-of-stock levels at the shelf have
also been resistant to improvement. A well-publicized 2007 study by Dr. Thomas Gruen of the University of Colorado and Dr. Daniel Corsten
of the IE Business School Madrid, based on funding from Procter &
Gamble, estimated that manufacturers lose something close to $100
billion in sales annually due to out-of-stocks at the shelf.

Solving the out-of-stock challenge can
therefore pay big financial dividends - especially for the companies
that can reach new levels of in-stock performance first, before
competitors do."

The editorial discusses areas where IBM is helping firms solve this problem by better optimizing inventory.

"In fact, according to Remzi Ural, a supply chain lead
in IBM's global consumer packaged goods practice, one beverage company
IBM recently worked with was able to increase its sales by 12.3 million
cases by significantly reducing its out of stocks, in this case
throughout its distribution network that served local stores "

Joseph Shaw from Ahold USA and Alex Scott from IBM will speak at the 2011 Material Handling and Logistics Conference. The conference is Sept 18-21 in Park City Utah.

Ahold is an international retailing group based in the Netherlands. Ahold had revenues of 29.5B Euros in 2010. Ahold USA is a wholly owned subsidiary of Ahold. Ahold USA operates Stop & Shop, Giant, and Giant Martin's stores as well as the on-line grocer Peapods.

The title of the talk is "Beyond the Traditional Network Analysis."

"So you are challenged with managing a large portfolio of products and a
complex set of vendors, customers and distribution locations. How do
you make sense of this all and streamline your supply chain? This
session takes you beyond the pin-on-a-map network analysis and examines
factors such as sourcing strategies, inventory optimization, route
planning and more. We will also review a grocery case study that
involved the analysis of sourcing effectiveness, evaluation of DC
investment opportunities, and relocation of legacy facilities to get the
most out of their supply chain network.
"

Click here for the link to the conference tracks and a full bio of each speaker. This talk is in Track 3, Session 2 at 10:15 AM on Monday.

This is a major release for this product. It has a new interface, improved run time performance, additional constraints and settings, and enhanced optimization capabilities. The product embeds IBM ILOG CPLEX Optimizer. Specifically, the optimization engine takes advantage of our powerful constraint programming engine which is well suited to these types of problems. All of this allows you to more easily solve larger problems and address other routing problems.

IBM ILOG Transportation Analyst is a strategic tool that allows you to determine the best routes, size your fleet, determine best backhauls, determine how to best use hubs, and make mode selection choices between private fleet, commercial carriers, multit-stop routes, and LTL.

This product is a nice complement to IBM ILOG LogicNet Plus XE. When designing a network, it is often important to understand the implications to routes, fleet sizes, hubs, and modes. The product also complements Sterling TMS by providing a strategic complement for doing what-if analysis.

At the May 2011 Manufacturing Leadership Summit, The Dow Chemical Co. won a Supply Network Mastery award for their global supply chain optimization initiatives.

The award sited a few examples of the type of work they did:

"One Pacific-area team used a Network Optimization Work Process to
evaluate tank usage. Optimizing tank usage for multiple products cut
costs, improved service levels, and reduced GHG emissions; the latter
has become a key performance metric in the Network Optimization Work
Process. Each network project looks not only at cost and customer
service, but also provides key carbon footprint data to reveal
opportunities for GHG reduction.

After the April 2009 acquisition of Rohm and Haas, D&MSC Work
Processes helped teams capitalize on synergy opportunities and optimize
the company’s Europe warehouse network. The evaluation identified
savings through consolidation of shipments to warehouses and reductions
in freight and warehousing costs. "

The award mentioned that these projects and others saved the firm $5 million during 2009-2010.

The article mentions that LogicNet Plus was part of the toolkit. For the a link to the full article, click here.